By Missy Ryan
WASHINGTON (Reuters) - The collapse of global trade talks could thwart efforts by poor African countries to curtail cotton subsidies and capitalize on a higher world price for the crop, a global cotton organization said on Monday.
Terry Townsend, executive director of the International Cotton Advisory Committee, which groups 44 cotton-producing countries, called the World Trade Organization's talks, known as the Doha round, the "biggest single issue in (world) cotton markets today."
If a new global trade deal can compel rich nations like the United States, which accounts for 40 percent of world cotton exports, to reduce generous supports for cotton farmers, ICAC expects global prices to climb. Without any such supports, the world price would rise by around 10 percent, ICAC believes.
Either case would be a boon for Chad, Mali, Benin and Burkina Faso, the West African countries that have made the price depressing effects of cotton subsidies a headline issue in the talks and a symbol of poor nations' trade ambitions.
But after five acrimonious years of negotiations, most onlookers are not optimistic a deal can be had soon.
ICAC believes that without a Doha deal, those countries, which already grapple with inferior farm technology and poor trade infrastructure, will remain relegated to their weak trading position.
Africa is the world's fifth largest cotton producer and its second biggest exporter; in West African countries alone, some 11 to 15 million people are dependent on cotton farming.
Output from those countries has been declining in recent years, ICAC said, not solely linked to rich country subsidies but also due to a stronger CFA Franc and poor weather.
The United States is not alone in its assistance to cotton farmers with subsidies or import restrictions; China, the European Union and others also support farmers.
Townsend also sees new production technology, competition from chemical fibers, and lower clothing prices as other factors behind a decline for average world cotton prices since the 1990s.
If a Doha failure does frustrate the push from the West African countries, known as the C4, it's uncertain if they would be able to revive their aspirations elsewhere.
Townsend is skeptical that a sector-specific agreement outside of the round would gain traction in the United States. "The U.S. industry would go nuclear," he said.
The National Cotton Council, which represents the U.S. industry, has long said it would support some reductions to subsidies but only if they occur in step with changes for other U.S. crops and in line with concessions from trading partners.
U.S. cotton subsidies are also under scrutiny in a high-profile WTO challenge from Brazil, which successfully argued that U.S. supports violate world trade rules.
The WTO is expected to issue a final ruling later this year on whether the United States has done enough to comply with the ruling.
